Amid Rising Tensions, India To Double Oil Imports From US To Reduce Dependency On Volatile West Asia Region: Report

Amid Rising Tensions, India To Double Oil Imports From US To Reduce Dependency On Volatile West Asia Region: ReportStorage tanks of an Indian Oil Refinery (Representative Image) (SAM PANTHAKY/AFP/Getty Images)

In a bid to reduce dependency on the volatile West Asia region, India is planning to double crude oil imports from the US, reports Hindustan Times.

According to the report, officials with direct knowledge of the matter said that India’s oil purchases from the US, which started in 2017-18, have already crossed about 6 million tonnes a year.

Besides US, India also wants long-term oil supply contracts with Russia and other oil producing countries in Africa.

“We can easily double our crude oil imports from the US to 12 million tonnes. We are in talks with the US government and private oil firms as petroleum is an unregulated business in that country. We expect good rates and better terms from American firms that would compensate for our transportation costs. In return, we can offer them an assured market,” one of the three officials was quoted in the report as saying.

As per the report, three west Asian countries, Iraq, Saudi Arabia and the United Arab Emirates, supplied about 51 per cent of the total of 226.5 million tonnes (MT) of oil worth $111.9 billion that India imported in 2018-19.

The diversification of the India’s crude basket is necessary because unlike other importers, it neither has its own resources nor has bought significant oil and gas assets abroad, the officials said.

In recent years, India has tried to diversify its energy sources with the focus on secure, stable and predictable supplies.

Earlier on Friday (10 January), Petroleum Minister Dharmendra Pradhan while launching a report of the International Energy Agency (IEA) had said that as proven oil reserves of India are limited compared with domestic needs, India’s import dependency is going to increase significantly.

“We are meeting in the backdrop of rising tensions in West Asia and its impact on stability and security in the region,” Pradhan said.